No Spike in Natural Gas Looming: Boone Pickens

The U.S. should continue to have a cheap energy advantage compared to the rest of the world, T. Boone Pickens, BP Capital founder, told CNBC’s “Squawk Box”on Wednesday.

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A hydraulic fracturing site

“There's going to be a fabulous opportunity for natural gas, but we're not there yet,”Pickens said.

Pickens expects natural gas prices to climb to $4 by the end of the year, but no major price spike. “You can make money at $4,” he said, “Of course, it's going to be better than at $2 or $3, but you aren't going to get many wells drilled.” (Read More: Inside The World of Fracking.)

Instead, Pickens sees a greater chance of a spike in crude oil prices. He’s predicting $115 a barrel on West Texas Intermediate crude by year’s end. Flare ups in the Middle East could cause a spike, Pickens cautioned.

“If (Israel) bombs Iran, you're going to have a spike up in oil price, there's no question about that, just because they bombed Iran, not because you're going to have a shortage of oil immediately,” he said. (Read More:Demand Is Weak, So Why Are Oil Prices Rising?).

Nonetheless, the U.S. will continue to have the world’s cheapest energy. “U.S. crude is 15 percent cheaper than Brent North Sea crude oil, and natural gas is 75 percent cheaper than China, the Mideast, Japan, or wherever else,” Pickens said.

Pickens said this energy advantage can be used to rebuild the U.S. economy. “You can build right now on the cheapest energy in the United States,” Pickens said. “You can build your economy back on cheap energy.”